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Press

21/05/2014 - Press Release - Sustainability

Risky Business

Sofia Figueiredo, Sustainability Manager at Veolia, makes a case for investment in sustainable industrial water management solutions

Water at Risk
Recent floods in the UK are a timely reminder that water resources are at threat from global climate change and human activity. Increasing urbanisation and industrialisation in developing countries is already causing further stress to scarce water resources. The 2013 World Economic Forum recognised water as the second highest global risk area after major systemic financial failure. To put things in perspective, it is estimated that if we maintain a "business as usual" approach to water management, by 2050, over $63 trillion of the global GDP will be at risk. Industry can make a significant contribution to a "blue growth" strategy by embracing water stewardship practices, focused on sustainable water use.

11,000 litres to produce a pair of jeans!
The products of some industries, including agriculture, export real water - bottled water, beverages, fruit and vegetables, liquid pharmaceutical products - but water footprint studies have identified the "virtual" water used in manufacturing. For example, it typically takes 15 litres of ultrapure water to produce a gram of vaccine and about 20 litres to produce a silicon chip. If the water used in producing the raw materials is also included, the'embedded water' in a product can be significantly higher: about 140 litres to grow one cup of coffee, 11,000 litres to produce a pair of jeans, about 400,000 litres to build a car and an astonishing 2,400 litres for a burger.

Uneasy Bedfellows
Manufacturing industry and public water supply are uneasy bedfellows. On the one hand industry generates wealth by providing employment and producing goods for sale. On the other it competes with agricultural demands and with domestic use for drinking, cooking, sanitation and personal hygiene, which are vital to public health. The UK's Chief Scientific Advisor, Sir John Beddington, has predicted a'perfect storm' where the interrelated challenges of water, energy and food shortages could unleash serious public unrest and international conflict by 2030. So, how can water treatment help to avert this impending disaster?

Recycling and Reuse
Industrial water management has the potential to reduce water consumption in manufacturing and, thus, industry's impact on the water environment. Indeed, many industries in Europe have already successfully implemented water reduction measures. The reason is an economic one. The cost of mains water and sewer discharge has almost doubled in the last 20 years and this has focussed attention on water. Every cubic meter of water recycled or reused means a cubic metre less of water to buy and a cubic metre less of wastewater discharge to pay for. Advanced wastewater treatment systems can produce a treated effluent, of better than potable quality, which can be recycled at a cost lower than that of municipal water. Opportunities for water reuse don't stop with the manufacturing process; grey water from office accommodation can also be captured and re-used for low quality applications such as washing vehicles, watering plants and flushing toilets.

The True Cost of Water
Typically water from the tap costs around 85p/m3 but that's only the start. There's the amortised capital investment in water treatment, storage and distribution, the chemicals and power needed for the treatment process and then the costs of disposing of the water after it's been used - around £2.25/m3 for sewer discharge. But that's just the direct cost of water. There are indirect costs too, like administrative, legal and corporate social responsibility fees. But the real cost of water has to take account of water-related risks. What happens to your business in the event of water shortage or flood? If you fail to meet regulatory standards for water or effluent, how will this affect your reputation? What are the financial implications of customer pressure in respect of environmental and sustainability issues? These risks are difficult to assess and even more difficult to quantify in financial terms.

Veolia has developed a model called the True Cost of Water, which puts a monetary value on the impact of water risk on future profitability. When decisions are being made on water strategy and water technology investment, it's important to quantify water risk and its impact on the bottom line. So the True Cost of Water combines traditional CAPEX and OPEX calculations with an analysis of four categories of water risk: operational, financial, regulatory and reputational. Operational risks are those associated with the loss of water due to external problems like a burst supply pipe or pollution incident or failure of in-house water treatment plant. Increases in the price of water supply, wastewater discharge or the chemicals, energy and consumables used in for in-house treatment are obvious financial risks. Regulatory risks include the results of failing to meet water quality or environmental standards imposed by regulators like the FSA, FDA or EA. That kind of non-compliance has repercussions far wider than the cost of any fines imposed, and these are reputational risks.

Introducing water reduction and sustainability measures helps to promote a positive public image, and the True Cost of Water model includes credits for this kind of saving, providing a better basis for making decisions about investment in sustainable water solutions.

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